Total cash earnings for Westpac Insurance during the 2011 financial year ending September 30 were flat, up just 1% to $199 million compared to $197 million in 2010.

Life insurance and lenders mortgage insurance (LMI) sales were offset by higher claims in general insurance due to last summer’s natural catastrophes.

The flooding in Queensland and Victoria, Cyclone Yasi and the Christchurch earthquakes cost Westpac about $100 million in cash earnings during the first half of the year.

General insurance cash earnings for the 12 months ending September 30 were down 84% to $5 million compared to $32 million in the 2010 financial year.

Life insurance cash earnings were up 22% to $121 million while LMI earnings grew by 11% to $73 million.

Inforce premiums for life insurance were up 12% to $506 million while LMI gross written premiums fell 45% to $53 million.

The bank says new business sales in life insurance were stronger across all distribution channels, particularly retail following a push for independent financial advisers to use BT and Westpac products.

The fall in LMI premiums was due to the bank deciding not to underwrite mortgages with a loan to valuation ratio greater than 90%.

General insurance gross written premium was up 10% to $307 million compared to $278 million in the 2010 financial year.

Commissions on insurance sales increased by 26% to $23 million during the year due to improved sales.

The increased distribution base resulted in expenses growing by 6% or $7 million due to expansion into the St George banking network and independent advisers.

There were 1.1 million Westpac customers with insurance products at the end of September, compared to 1 million at the start of the bank’s 2011 financial year.